It has been a joy to watch Manchester City
this season. Even without long term injury absentee Kevin De Bruyne, City’s revolving
cast of superstars have continued Pep Guardiola’s revolution. Last season, they romped to the
Premier League title with 100 points, 18 points clear of their city rivals Manchester United
in second place. That kind of dominance doesn’t just take skill,
or luck. Almost always – and Leicester City are perhaps the only exception to this rule
– it is the richest team that wins. And Manchester City is the richest of the rich.
Their success did not come cheap. Since the club was sold to Sheikh Mansour bin Zayed
al Nayhan – a leading member of Abu Dhabi’s royal family – in 2008, hundreds of millions
of pounds have been poured in to the club. The area around East Manchester was renovated.
The club now had world class facilities as well as a network of the clubs all around
the world – in the US, Uruguay, Australia, Spain and beyond – all under the City Football
Group umbrella. It was all thanks to an unlimited supply of
money – yes – but also to the prudence and strategic forward thinking of the owners
from the United Arab Emirates, right? Canny businesspeople who turned the biggest loss
in football history – £197 million in a single season – into a £10 million profit
last season, the third season in a row the club was in the black. In 2015, 13 percent
of the club was sold to Chinese investors for $400 million, valuing the club at today’s
exchange rate at £2.4 billion. Although it would likely sell for more today if the club
was put on the market. Much of this financial turnaround was thanks
to booming television and commercial revenue, with the latter proving particularly lucrative.
Huge sponsorships deals were signed with Etihad Airways, the mobile phone network Etisalat,
Abu Dhabi’s tourism authority and Abu Dhabi investment firm Aabar. All, of course, came
from the United Arab Emirates where Sheikh Mansour is the country’s deputy prime minister
and one of the UAE’s most powerful men. The companies were often run or owned by members
of his own family. There had always been question marks over the true value of those contracts;
suggestions that they had been artificially inflated to comply with UEFA’s Financial Fair
Play rules which were designed to curb just such profligate spending from the bottomless
pockets of Sheikhs and oligarchs. Or as the then UEFA president Michael Platini called
it, “financial doping”. Those accusations were dismissed by the club. UEFA did conclude
that City had inflated the market rate for its sponsorship deals, but only received a
slap on their wrists. More on that later. But, at the start of November, a very different
story began to emerge thanks to Football Leaks, a mysterious organisation that has released
sensitive documents exposing the dark underbelly of football. This batch of internal documents,
leaked to the German publication Der Spiegel and shared with European Investigative Collaborations
(EIC) appeared to show how Manchester City’s ownership had allegedly gone to extraordinary
lengths to circumvent UEFA rules to pump huge amounts of cash into the club, much of it
officially off the books so that it appeared to comply with FFP. In one leaked internal
document, dated a few days before Sergio Aguero’s famous injury time goal against QPR clinched
Manchester City its first Premier League title in 2012, the “Total Cash Investments in
MCFC” by Sheikh Mansour since his take over stood at £1.1 billion. Big spending to win the title was nothing
new of course. Jack Walker, a self made steel magnate, famously bankrolled Blackburn Rovers,
his boyhood club, to the Premier League title in 1995. But this was a different era, one
where Financial Fair Play was the order of the day. FFP was UEFA’s attempt to reign in
the debt that was threatening to sink European clubs whilst also preventing billionaires
from simply buying titles. But rather than comply, the Football Leaks revelations show
that Manchester City was hell bent on spending the money they needed to catch up with Europe’s
elite anyway, and allegedly devising a secret project to hide over £100 million worth of
investment. According to the leaked communications from
within Manchester City, the club was massively inflating its sponsorship contracts to hide
cash injections from the owner, which would be a clear breach of FFP. One such email reported
on by Der Spiegel appears to show how City’s Chief Financial Officer Jorge Chumillas outlined
how the sacking of Roberto Mancini left the club with a £10 million liability. “We
will have a shortfall of 9.9m pounds in order to comply with UEFA FFP this season,” he
wrote. “The deficit is due to RM [Roberto Mancini] termination. I think that the only
solution left would be an additional amount of AD [Abu Dhabi] sponsorship revenues that
covers this gap.” Which is exactly what they did. Simon Pearce,
an Australian PR executive who sits on City’s board and who is in charge of massaging Abu
Dhabi’s international image and reputation, suggested backdating sponsorship contracts
including a fee for winning the FA Cup. When Chumillas asked Pearce if that was possible,
Pearce replied: “Of course, we can do what we want.” Most damningly the emails appeared
to show that other contracts were in effect sham deals funded by the Abu Dhabi royal family.
Take the £15 million sponsorship deal with Aabar. It was, in fact only £3million from
the company, the rest from the family. “As we discussed, the annual direct obligation
for Aabar is GBP 3 million,” Pearce allegedly wrote in one email. “The remaining 12 million
GBP requirement will come from alternative sources provided by His Highness.” This
was, in effect, an attempt to cook the books and pull the wool over UEFA’s eyes, disguising
cash investments by “His Highness” to make Manchester City appear to be more profitable
than it was. In total it appeared that the extra money hidden from view amounted to £127.5
million. There were other schemes too, one dubbed Project
Longbow, that involved setting up a shell company to buy the image rights of players
from the club, which opened up what looked like another stream of income. In effect,
the money allegedly came from Abu Dhabi. Even Roberto Mancini’s contract appeared to be
part paid by a football club in the UAE. Mancini was also contracted to “advise” Al Jazira,
an Abu Dhabi club owned by Sheikh Mansour, which isn’t part of CFG. It was another attempt
to get more money of City’s books. But this still wasn’t enough. When FFP was
rolled out, for the 2013-2014 season, UEFA’s investigators zeroed in on what looked like
artificially inflated sponsorship contracts. Two clubs in particular concerned UEFA. Manchester
City and PSG, effectively owned by the state of Qatar. PSG had signed a five year, £190
million a year contract with the Qatar Tourism Authority. The value of the contract was close
to £1 billion. UEFA decided that the true value of the contract was just under £2.5
million a year. The same discrepancies were found at City. But rather than accept censure,
which could have included a huge fine and a ban from the Champions League, according
to the leaks City threatened UEFA with legal action that could bankrupt it. The club’s
lawyer Simon Cliff allegedly wrote in an email that City’s chairman “Khaldoon [al Mubarak]
said he would rather spend 30 million on the 50 best lawyers in the world to sue them for
the next 10 years.” UEFA would have to decided whether to proceed as planned or “avoid
the destruction of their rules and organisation.” The Football Leaks trove of emails showed
that the Gianni Infantino, who was then general secretary of UEFA, bent over backwards to
accommodate City and PSG for the breaches of FFP they were found guilty of. In the end,
both City and PSG accepted small fines and a mild slap on the risks. City’s internal
team declared it mission accomplished. So what’s next? UEFA’s new president has announced
that they may go back and look at City and PSG’s cases but there are doubts about whether
they can be punished given that both clubs have already accepted censure. And will UEFA
really want to take on the bottomless pit of money that the royal families of Qatar
and the UAE could use to destroy it? But the revelations have done one thing. Until
recently, the ownership of Manchester City was seen as a benign, good news story that
burnished Abu Dhabi’s reputation. But recent revelations about human rights abuses in the
country, and the appalling lose of life and levels of child starvation in the war in Yemen,
a conflict the UAE is heavily involved in, has tarnished the country’s reputation. Key figures at City like Mubarak and Sheikh
Mansour are involved in the highest level of economic and political decision making
in the UAE. Separating the team from the political and military actions of the country has become
harder. In the wake of the Football Leaks revelations, Amnesty International declared
that “The UAE’s enormous investment in Manchester City is one of football’s most brazen attempts
to ‘sportswash’ a country’s deeply tarnished image through the glamour of the game.” City have said very little about the revelations,
although they haven’t denied the probity of the documents. Instead they have said that
the leaks were an “organised and clear” attempt to “damage the club’s reputation”.
The club and city fans have long argued that FFP is any case an unfair restraint on fair
trade. Why should a club be restricted in investing their own money in their club. A
case could be made that FFP in fact entrenches the dominance of the bigger clubs, and prevents
new players, like City and PSG, from breaking that cartel. But both clubs knew the rules
and signed up to them. If UEFA decide not to investigate City and PSG’s alleged financial
transgressions, then none of these revelations will matter. It would be hard to imagine any
revelations that could. Money and political power will win. Like it always does.

Manchester City & Football Leaks Explained
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